The US Energy Information Administration (EIA) raised its oil price forecasts for 2026 and 2027 as supply disruptions in the Middle East tighten global inventories and diesel markets remain constrained.
According to EIA’s October Short-Term Energy Outlook (STEO), the Brent crude oil is forecast average $96.32 a barrel in 2026, up from about $91 in its September outlook.
West Texas Intermediate (WTI) crude oil is expected to average $88.21 a barrel this year.
The Brent spot price averaged $114 a barrel in September, up $23 from August, as attacks on oil infrastructure and tankers in the Middle East intensified, according to the report.
Attacks on Saudi Arabia’s East-West pipeline temporarily halted flows along a key route that bypasses the Strait of Hormuz. Before the attacks, the pipeline carried more than 5 million barrels per day (bpd) of oil exports through the Red Sea port of Yanbu, EIA estimated.
The disruption pushed the daily Brent spot price as high as $131 a barrel on Sept. 15. Prices eased in the final week of September after repairs allowed pipeline flows to partially resume on Sept. 22, the agency said.
EIA expects Brent to average about $105 a barrel in the fourth quarter, $14 higher than its previous forecast, as oil flows from the Middle East remain constrained.
Higher insurance costs have also pushed up tanker rates, while longer voyages to avoid conflict zones have reduced vessel availability. These factors are increasing the cost of delivering crude to refiners, according to EIA.
Tight diesel supplies are also putting upward pressure on crude prices as refiners seek to meet strong diesel demand.
EIA estimates that global oil inventories fell by an average of 1.9 million bpd in the third quarter and forecasts a further decline of 0.7 million bpd in the fourth quarter.
– Prices expected to decline gradually in 2027
EIA raised its 2027 Brent price forecast to $83.74 a barrel from about $73.74 in its September outlook. WTI is forecast to average $79.74 a barrel next year.
Despite the higher forecasts, EIA expects oil prices to gradually decline as Middle East production recovers and global inventories rebuild.
The outlook assumes that pipeline and overland bypass routes, increased ship-to-ship transfers and new bypass pipeline capacity expected to come online in the United Arab Emirates in 2027 will help bring shut-in production back online.
The agency expects most oil production in the region to return to pre-conflict averages by the end of the second quarter of 2027.
Brent is forecast to average about $87 a barrel in that quarter before falling to around $74 in the fourth quarter as global inventories build.
EIA cautioned, however, that the conflict could cause continued volatility in oil flows through the Strait of Hormuz and alternative routes, potentially resulting in greater short-term price fluctuations than reflected in its forecast.
– Global oil production expected to recover
Despite the increase in attacks, EIA estimated a rise in Middle East oil exports in September compared with August.
Global petroleum and other liquid fuels production is forecast to average 101.09 million bpd in 2026, rising to 109.55 million bpd in 2027.
US crude oil production is expected to average 13.87 million bpd this year and 14.30 million bpd next year.
